Suppose the following direct quotes are received for spot and one?month French francs in New York: .1260?684?Then the outright 30?day forward quote for the French is:

Question

Quizplus · Accepted Answer

To calculate the outright 30-day forward quote for French franc, we need to use the formula:

Outright forward = spot rate + (points/10000),

where points = 30-day forward points.

Given that spot quote for French franc in New York is .1260 and the one-month quote is .0684. We can calculate the 30-day forward points as:

30-day forward points = (one-month quote - spot quote) x (12/1)

= (.0684 - .1260) x (12/1)

= -6.912

(Note: The negative sign indicates that the 30-day forward rate is lower than the spot rate)

Substituting this value in the formula, we get:

Outright forward = .1260 - (6.912/10000)

= .1264

Therefore, the outright 30-day forward quote for the French franc is .1264. Option B is the correct answer.

Suppose the Following Direct Quotes Are Received for Spot and One?month